This article was contributed by Euclid Law founding partner Oliver Bretz and Edge Legal founding partner Damien Geradin. The two boutique firms merged in February 2017 under the banner Euclid Law
There is something strange happening in the legal market. A new breed of law firm is emerging – not the traditional geared partnership structure but a small agile animal that is highly specialised in its feeding habits: the boutique law firm. Unlike the traditional full service model, boutique firms are typically highly specialised, run by senior lawyers and characterised by low gearing.
Why are boutiques emerging now, at a time when the legal value chain is fragmenting? The answer is simple: they are not competing with the traditional law firms but complement the law firm offering where there are gaps and where market changes are being driven by client demands. Clients are increasingly looking at individuals rather than firms, skills rather than brand, experience rather than arrogance and partner commitment rather than partner absenteeism. Agile working and true diversity are the two hallmarks of the new market – a market that is both disruptive and disrupted. As legal technology providers are attacking the bottom end of the value chain and specialist firms the top end, many law firms in the middle are being squeezed, due to their high cost-base and the profit expectations of their partners. Brexit is also undermining the cross-border law firms, with too many lawyers located in London and too few elsewhere in the EU, especially in Brussels.
When we created our Competition Law Boutique, Euclid Law (and its merger partner Edge Legal), it was in an attempt to be very different, but as direct complement rather than competitor to the law firm model. Our ethos was to be “built in” and not “bolt on”, to work with other law firms and clients, in whichever way would be most useful. We also decided that we would do as much work as possible ourselves rather than pushing it down to a crowd of juniors, even if that was less profitable. Agility was a must – we would generally work either on our own or as part of a larger legal team, whatever suited the client best.
With the rejection of the gearing model came something that we had not experienced for many years: Happiness. It was actually fun to be a lawyer again, roll up our sleeves and get our hands dirty. After many years in big structures, we were back at the coal-face, fighting our clients’ corner, sparring with competition authorities and delivering on our promises. Clients seemed to like it. With it came a sense of liberation and the ability to be true to our values and to those of our clients. So, when you wonder what makes us tick, what makes us smile, the answer is simple: doing the one job that we are expert at – and doing it really well.
What are our predictions for the future of law firms: there will clearly be a global elite of 10 or 20 law firms who will thrive on large cross-border deals, but the traditional full service model will need to change. For many firms, having a dedicated competition law partner with significant financial expectations is an expensive luxury. A dedicated Brussels office is another such luxury. Outsourcing those elements to a specialised boutique is a no-brainer from a cost and quality perspective, especially as clients are becoming more accepting of new business models. The added benefit is that the boutique can become a pool of recent know-how, experience and expertise that individual firms would not have in themselves.
Another area is conflicts, where firms have traditionally been forced to send work to their direct competitors. The boutique law firm is not a threat to the referring firm because its ability to offer services outside the core area of expertise is, by definition, very limited. The boutique may also be able to manage commercial conflicts in a way that can retain some of the work within the referring law firm, rather than giving all of it away. By way of example, we routinely work with associates from other firms to manage commercial conflicts.
Euclid Law and Edge Legal have just merged so that we now have slightly greater scale, a market-leading bench and a strong Brussels presence – but without losing any of our agility, motivation and drive. We are well equipped for the future, whatever the future may bring.